I have to chime in on Healthcare

I've decided to chime in on the healthcare debate because I know that everyone is anxiously awaiting my uneducated opinion. Yes, I really don't know what I'm talking about here, but that doesn't stop me from having an opinion (just like most of you).

Healthcare is a tough one because no matter how you do it or how much money you throw at it, in the end, everyone dies - and nobody wants to die. The ideal situation, where everyone gets the latest treatments with the best doctors for free is just not possible. This makes healthcare choices not so much about right and wrong as about bad and a little bit better than bad. That is a tough sell, because 'a little bit better than bad' can still be picked apart and criticized even though it is better than the alternatives.

So here are my thoughts:

• People need healthcare insurance. I mean everybody. If you don't have it, you are just trusting that if something really bad happens to you, everybody else will chip in and pay for it. That's not a good system.
• It's ridiculous that if you are not on a group plan and you have health problems, you are out of luck. It will be this way as long as the system is based on the profit of insurance companies. These companies have no incentive to do anything different. Competition is fine and good, but it won't fix the fundamental problem that insurance companies don't want to compete for the people who are already sick!
• Another problem in my mind is that we don't have any price competition with the medical care itself. When was the last time you chose anything medically related based on price. We generally don't even think about it.
• Everyone that is afraid of government involvement (and rightfully so) needs to realize that the government is already involved. It's called Medicare. Don't you think that all the private insurance companies are basing what they cover on what Medicare covers? So right now, you have de facto control by the government over your health care, like it or not.

I don't see any way around the government being greatly involved as much as it pains me to say it. It is what a great majority of the rest of the world does including many places that have better healthcare (overall) than us.

I think the plan needs to be universal (required for everyone). A person can opt out only if they have other health insurance.

We need a plan where people have to pay a percentage of the bill so that we, the consumers, put price pressure on the system and make wise choices on how often we visit the doctor, what tests we have run, etc.. I don't trust insurance companies to do it well, and I don't trust the government to do it well either. (I'm still upset about a tv show I saw many months ago where wealthy elderly people were going to the doctor weekly at government expense just because they needed someone to talk to. If they got two visits a year, and then had to pay 50% after that, I don't think they would do it as much. )

I kind of like the idea that the percentage you pay is based on income. (The richer you are, the higher percentage of the total cost of services you pay). This view treats healthcare more as a fundamental right, than a privilege or reward for working hard. I think I agree with that view.

One final thing ... I have no idea how we should pay for it!

Conservatives, Liberals, and the Great Depression

Just a quick post to share something I find kind of funny. Most of you probably won't, but I'll share it anyway. :)

I was in two facebook status/comment discussions at the same time. With one person I was arguing that government spending did in fact have an impact on the economy and the idea of a stimulus was a good thing. With the other person, I was defending the argument by Republicans that there is plenty of non-economic focused spending in the stimulus bill that shouldn't be there. Then in unison ... they both bring it up - The Great Depression.

Person 1 paraphrase: The Great Depression showed that government intervention works - FDR was a hero.

Person 2 paraphrase: The Great Depression showed that government intervention didn't work - FDR was a goof. We would have recovered much quicker without him.

Hilarious. Same event, and two completely opposite views ... so I did what anyone would do - I googled it. Turns out the real economists are split pretty evenly on this as well. The cause of the Great Depression is generally agreed upon (Money Supply, Gold Standard, etc.) The reasoning for why it took us over 12 years to recover is not. Very good arguments have been made both ways by people smarter than me. It's hard to argue with the fact that we did recover ... eventually. It is also hard to argue with the fact that it was the worst (most prolonged and painful) recovery ever. Oh yes ... and that most all the other countries in the world suffering through the same depression recovered much quicker.

Another interesting note: FDR was viewed at that time much as Obama is now, and Hoover was viewed much as Bush is now. FDR could do no wrong. I ran into a Will Rogers quote, he basically said that FDR was idolized so much that he could burn down the white house and the public would say 'great, look at that, we started a fire!'. Hoover was thought to be market driven and relaxed on government-intervention but his actions in office were anything but. This reminds me of Bush talking about fiscal responsibility and spending a whole bunch of money.

So the lesson here in my humble opinion is to beware of group-think. We all have a certain opinion, then we read things that mostly match that opinion. Look at anyone's blog roll to see this - generally not much diversity there. As we read more, we begin to lean even more in that direction. Eventually we think one side is right and the other side is wrong when the truth usually lies somewhere in the middle. If living in China taught me anything, it is that we as humans are not the independent thinkers we claim to be - we are very much a product of the information we take in.

Cheney's comments - Scary!!

An excerpt from a report on an interview with former VP, Cheney:

“When we get people who are more concerned about reading the rights to an Al Qaeda terrorist than they are with protecting the United States against people who are absolutely committed to do anything they can to kill Americans, then I worry,” Cheney said in the interview published Wednesday.
"These are evil people. And we’re not going to win this fight by turning the other cheek," he said.

Yikes, these are some scary comments. How can a person not be more concerned about values like freedom, and human rights than these quotes show? In my mind the only way you can possibly justify this type of behavior is if you are confident that every person you are interrogating is in fact guilty. In my opinion, there is no way that is possible. We have been torturing innocent people, and the fact is you could make a good case we shouldn't even be torturing the guilty ones!

I personally am willing to sacrifice a bit of safety in order to stand up for American values. If you think about it, we actually do that every day with domestic policy. I have lived in mainland China and can tell you that I have never felt safer than when I was there. However, freedom and human rights are greatly sacrificed there to achieve this safety. They execute people for things we would not. They do not allow any type of firearms at all. Often times you are guilty until proven innocent.

2000 or so people died in the twin towers attack, and that is terrible. But how many people have died due to gunshots? How many people have died because convicted felons are put back on the street? How many people have died because we presume innocence? My guess is it is a much bigger number than 2000 - and yet we are generally ok with it because it preserves our values of freedom and human rights.

We sacrifice our local safety daily so we can experience these liberties. Why should this change when we look at foreign policy? I don't think it should. Treat all people as human, with respect, and value them. This is how we will set an example for the world. If it makes us a little less safe, so be it.

Thoughts on Economics and the Stimulus

Economics is complicated. That's why I like it. There are right answers and wrong answers, but no one is sure which is which. It's the kind of stuff that makes your brain turn. I am not an expert, but that doesn't stop me from thinking about it!

First, the economy is nothing more than the resources (money) we spend. There are three parts to this ... what we as consumers spend, what businesses spend, and what the Government spends.

So let's look at consumer spending:

We can stimulate by lowering our taxes, right? This gives us all more to spend so it stimulates the economy. True, and it has worked in the past. But logic says it can't work forever. Eventually taxes get so low that the government can't function. I don't know about you but I like having schools my kids can go to and roads to drive on.

At some point these huge government deficits are unsustainable ... lowering taxes makes that situation worse.

Right now, if our taxes were lower, most of us would save a good chunk of it (or pay off debt). These actions do not help the economy at all. So you've taken a big chunk out of the efficiency of this solution. I get an extra 1000 dollars, but I only spend 200 more than I would have without it. Not a very good return on investment.

A lot of what we would buy with our extra money is actually an import. A good chunk of it would go overseas to China or the like. China in the past has been generous in reinvesting that money in the US Government and US companies. Those investments aren't looking so good now. I doubt they will keep it up.

Some will say that lowering taxes will raise tax revenues in the future because the economy will be stimulated, causing us to earn more, thereby the percentage of our income goes down, but the tax dollars we pay goes up. This may be true at some levels. Logic again says this doesn't work forever. If taxes hit zero, revenue does not go up - there is none! Somewhere there is a line.

Lowering taxes generally affects those who pay taxes so it has a disproportional benefit on the rich. The rich have money, so it makes sense to stimulate the economy by starting with them, but this increases the gap between rich and poor. Trickle down economics is just that ... a very small trickle ever makes it to the poor.

Business Investment:

I don't have much to say on this one other than our tax rates on businesses are high and I don't really understand why. In my uneducated opinion, I would think that lowering this would be the best way to stimulate the economy. Of course, most people would see this as bailing out the CEOs while we little people get nothing. I don't get that. CEOs make way too much ... I agree. But my company also pays my salary, and I kind of like that. We all get paid by companies. If they benefit, we benefit.

Government Spending:

Here is where things get messy. As best I can tell it has never really worked. However, it is still very attractive because the people running the show get to throw lots of money at whatever they want. I read an article in the WSJ the other day saying Obama's team was using a multiplier figure of 1.5 - meaning that for every billion they spend, they think the economy will benefit by 1.5 billion. I totally don't get that! If that's really true, why not spend 10 Trillion, or 100 Trillion ... I mean a 50% return is pretty stinkin' good!

First of all the Government doesn't have the money to spend - so the cost of borrowing money must get added in and it rarely is. This would lower efficiency and take the multiplier below 1.

The government is generally inefficient. They do less with the same amount of money than a private corporation would. This would lower efficiency and take the multiplier below 1.

Government spending takes a long time which leads to inefficiency. Have you ever seen them do anything fast?

Government spending can be focused on domestic investment so this is a big advantage over tax cuts.

Government spending can be focused on the poor which may not do much for the economy, but is a nice plus.

Government spending can potentially use resources (labor, etc.) that would have otherwise been used for private investment. This lowers efficiency. The only way government spending doesn't do this is if every resource the government pays for would otherwise be sitting idle - an impossibility.

Whew! That's enough for now. Here is where I fall after all of this: I think theoretically government spending would work the best if and only if we were smart enough to know how to do it. The problem is, we are not! We may or may not target the right things. The thing I like about lowering taxes is that it allows everyone to try something different which increases the chance that someone will succeed in spurring on the economy. I think this is why tax cuts have proven to work in the past, and government spending results have been debatable.

If I were king for a day ...
First of all, I would have more information and need to be quite a bit smarter, but ignoring that point:
I would lower business taxes and temporarily lower consumer taxes.
I would focus government spending on specific projects that support business. (roads, power, etc.)
I would focus government spending on the poor so that we try to do some good. If we have to spend it somewhere, I would prefer there.

So that's my plan. Similar to what's out there, but different. More business tax cuts, and less government spending (with more focus). Of course, that wouldn't be very good politically for a lot of people ... and that brings us back to what makes government inefficient.

(Very) Random Thoughts

I was proud to be an American yesterday. I think it was a good day for us.

I was a bit disappointed in Obama's speech ... it just wasn't very memorable for me.

I loved the last prayer at the inauguration although it's range of attitudes was strange ... starting with Thee's and Thou's and ending with informal humor. It was an odd mix, but it was the most memorable part for me.

Obama must be worn out!!

Listening to Rush Limbaugh (which I do very very seldom) make fun of the inaugural poet, saying she sounded like the lady in his GPS device that gives him instructions, was hilarious.

I'm spending time reflecting on the Sermon on the Mount right now. It's Amazing. Many of you probably know that Jesus says our righteousness can not get us to heaven because we are not perfect. But do you know that our righteousness (how well we follow the law) will be rewarded in heaven? There will be 'least' in heaven and 'most' in heaven. If you're looking for a place where everyone is 'equal', then I guess heaven isn't it. Think about that for a while.

K-State basketball has started 0-3 and as usual most people are overreacting. My estimation is that 8 of the 12 teams in the Big 12 would have started 0-3 with K-State's schedule. Only KU, Oklahoma, Texas, and Baylor might have won one or two of the three games. All we've discovered to this point is that K-State is not a great team - which anyone paying attention already knew. Whether they finish 5th or last, we just don't know yet. Give it 3 more games and then overreact.

Reasons to like an Obama Presidency

I voted for McCain. My views simply lined up with his views better than with Obama's. But that being said, there are several things I'm looking forward to with an Obama Presidency so I thought I'd list them here. The cool thing about America is we just had a historic, power-changing election and the next day there were no riots, no violence, and everyone goes back to work. I love this country!!

Reason #1
We immediately regain the world's respect and admiration. I don't think most people realize what a hit our reputation has taken around the world and how much that affects us here. Only in America is Obama's story possible. The world recognizes this and at the core this is what they admire about America. America is exceptional in it's culture of freedom and opportunity! Too often lately, we have been leading by force rather than by example. I'm excited to be in a country that is a positive example to the world!

Reason #2
Obama realizes that the U.S. is not God's favorite nation, or God's favorite people. Our lives are not more valuable than other lives. We live in a global community and we often lead it, but we do not rule it. We have been blessed tremendously and it is our responsibility to be a blessing to those around us. We must focus on that responsibility and lead by example. It is not our God-given right to rule the world or expect more from the world than we do from ourselves (see torture). I don't think Bush or McCain necessarily believed these things, but our actions over the last 8 years seem to have drifted in that direction.

Reason #3
It is awesome to see black Americans rejoice and finally know on a national scale they are an equal part of what makes this country great. It is truly historic; it is incredibly meaningful; and I love it!

Reason #4
I will thoroughly enjoy listening to the man speak over the next 4 years. He holds the ability to write and speak words that motivate and inspire. I believe this is a key function of a good leader and something that has been missing for a while around here. :)

One Economists view

Check this article out:

http://www.cnn.com/2008/POLITICS/09/29/miron.bailout/index.html

This gets into what my previous post was about. The government created the problem and so they are trying to create more government to fix it. At this point they may not have a choice ...

Economic Mess

Here is my fairly uneducated and unresearched, relatively simple explanation for the financial mess our country is in.

1. Government decides it is a good idea to encourage home ownership for the middle class and creates regulations and incentives to support it including Fannie and Freddie.

2. As a result of the incentives, banks begin making loans they should not make. Housing prices continue to climb so the loans don't look so risky.

3. We can all buy a house that is unaffordable for us, pay no money down, and pay a ridiculously low monthly payment. Most of us did it ... admit it.

4. Mortgage brokers and banks 'securitize' the loans by packaging them into investments like bonds. These bonds are rated/regulated by various agencies, but it is difficult to rate the risk of them because no one really knows what type of loans are in them.

5. The securities are rated 'very safe' by regulators because no one understands them, and housing prices always go up anyway, right? Investors trust the regulators and buy up the securities. This investment increases the amount of money available for institutions to lend, and so they do ... often with even more risky loans.

6. Global demand for oil and food, crazy government spending, and a weak dollar cause inflation. Things begin to cost more. Hello $4 gasoline!

7. The Federal Reserve raises interest rates to curb inflation. Economics 101. Higher interest rates give you less incentive to borrow money, and more incentive to save money. So you buy less which lowers demand and thereby lowers prices.

8. Uh-oh. All of those adjustable rate mortgages go up with the Fed's interest rate increase.

9. People can't pay their mortgage on the 'house they couldn't afford' and they tell the bank they can have their home back - foreclosure.

10. The monthly checks being sent to banks for mortgages each week decrease, and the banks instead get a bunch of homes they don't want. They now have less cash coming in, and a pile of homes that may or may not be worth what the people owed on them.

11. The banks need cash in order to give you money when you want to withdrawal it from your checking account so they try to get rid of their homes as soon as possible.

12. The housing market is affected by the huge number of foreclosed houses being sold on the cheap. Housing prices go down. Oh ya - and people generally don't have money to buy a home because everything costs so stinkin' much.

13. Now the bank situation worsens. The homes they own are worth less. People also see that their homes are worth less which leads to more foreclosures.

14. The banks run out of money. Too many homes, not enough money coming in the door. The banks have to sell all their assets (open loans, and homes) unless they are bailed out by the good old government. Coincidentally, banks also don't have money to lend to small or large business in other areas like technology, construction, etc.. The money is gone. This hurts everyone.

15. Those securities that were really just packaged home loans aren't looking so good. Their value plummets. Investment companies are hosed because they own way too many of them and no one wants them now. (Except the government ... haha)

16. The government has no choice but to save the day. Otherwise we would be in a really, really bad situation. They blame Wall Street of course, not themselves. We all cross our fingers and hope it works.

Interesting thought ... it was both excess regulation (the government going way too far to encourage home ownership) and not enough regulation (the government not being smart enough to know these investments were not accurately rated) that caused this problem.

Democrats charge that we did not have enough regulation and that government needs to be more involved. Which is fine, except that it was largely regulations to encourage home ownership that started everything in the first place. It was not long ago that politicians were touting the availability of 0% down, low interest home loans to the poor as a success story. Fannie and Freddie were largely Democratic party (for regulation) ideas.

Interesting thought #2 ... Everybody is mad that executives of failed companies make so much money, and they should be. But be honest, it didn't contribute to this problem. When you're counting in trillions, millions don't matter. To put it in perspective comparing 1 million to 1 trillion, is the same as comparing 1 dollar to 1 million. It is nothing.

OK, that was fun. Now off to work.

Obama, McCain, and Taxes

I am seriously leaning towards voting for McCain/Palin. I'm 95% sure that's the way I will go, but I am very frustrated with the misinformation out there about Obama's tax plan. I encourage anyone to go read about the plans to get the real information.

If you make less than $250,000 as a couple ($200,000 as an individual), your personal tax burden will go down more with Obama's plan than with McCain's. If you make more than that, you will be hosed with Obama's plan, but that's not my point ... because most of you don't. :)

I've heard from multiple people who are worried about Obama's tax ideas. There are legitimate concerns, but they are not related to an average person's personal income tax rising. Even if you are worried about capital gains, the capital gains increase Obama suggests doesn't apply unless you make over $250,000 as a couple. Most people's capital gains are in their retirement in which case they are taxed as personal income anyway.

Concerns about Obama's corporate tax plans, concerns about the economical effects of taxing the investments of the rich, and concerns about adding more complexity to the tax system are all valid. Arguments can be made that all of these will negatively affect the economy. But concern about your individual taxes going up is not valid! (Unless you are 'rich')

I have other concerns with Obama: mostly that he does not have a single actual important decision that he has made with specific positive results on his resume. He's voted a lot (sometimes 'present' ;) ), and helped write some laws, but mostly he has just run for President ... and done that well. I can't find any evidence showing that anything would be substantially different if Obama hadn't been around the last few years. He's never made a truly difficult decision impacting a city, state, or country. That is troubling to me.

On a side note: The 'no experience' thing is handy for him when running for President because no one can not criticize his decisions, just his ideas (which he can change rapidly if necessary - see NAFTA in the democratic primaries). He hasn't made any decisions so there are no decisions to criticize!

That's enough politics for now. I'm going to finish my lunch.

Obama and Religion

In case you missed it, (I did!) Newsweek had a good article on Obama's religious beliefs. You can read it here. Obviously everything Obama or McCain says right now about their religious beliefs is carefully calculated so you have to take it with a grain of salt, but this article provided some interesting information on Obama's background, how he came to decide to follow Jesus, and some hints about what he feels 'following Jesus' means. It's a good read and helps clear up some of the misinformation out there. (No, Obama is not a closet Muslim!!) In fact, in my opinion his life history compared to McCain's shows a stronger pattern of following Jesus. Obama researched multiple religions, made a conscious decision, was baptized, and was an active member of a church (until that recent flare up!). McCain is not a member of a church although he does attend one sometimes. He has also stated that he found great comfort in prayer while a POW in Vietnam. I'm certainly not saying I agree with all of Obama's theology (or McCain's for that matter). And I'm not saying that Obama's policies are more 'Christian' than McCains. I'm just saying from a life event standpoint Obama has a solid Christian history.

On a side note, I'd like to officially declare myself as firmly undecided. I'm attracted to things about both candidates. Right now I'm leaning towards McCain because his strong pro-life stance tips me in that direction. However, there is much more to leading this country than being pro-life so I'm still trying to balance out all the issues. On the other side, personally, I feel it would be a huge benefit to our country both domestically and abroad to show the world (and ourselves) that we can elect and follow a president that is both black and has a Muslim sounding name. I really like the fact that I'm basically OK with either Obama or McCain - a complete opposite from 2004 where I didn't really want either one.

My wife would accuse me of being sucked into the Obama media frenzy. I don't know about that, but I am intrigued by him. I think he dominates the media not really because of bias (although I'm sure there is some of that), but mostly because he is an infinitely more interesting story than McCain. Of course, a more interesting story doesn't make a better president.